Russian c-bank: Complaints against Forex dealers account for 4% of total in 2019

Maria Nikolova

The complaints targeting Russian Forex dealers accounted for 4% of all complaints against professional financial market participants in 2019.

The Central Bank of Russia has earlier today posted a report about the work of its consumer protection department in 2019.

The data show that, in 2019, the Central Bank received 246,600 complaints from customers of financial services providers. This is down 2.8% from 2018 levels.

The number of complaints against professional market participants, a category that includes FX dealers (OTC Forex services providers), was 1,000. This level is 30.5% lower than in the preceding year.

Among all of the complaints against professional market participants, the ones targeting FX dealers accounted for 4%. This compares with a proportion of 2.1% a year earlier. Let’s note that there are currently only four licensed FX dealers in Russia.

The relatively small number of complaints targeting Russian Forex dealers is not an indicator of the health of the Russian Forex industry. Especially as the number of entities offering Forex services in Russia without a license remains substantial.

In October 2019, Russia’s Federal Financial Monitoring Service published a warning about a number of foreign entities that illegally offer online trading services to Russian investors.

These entities, according to the regulator, abuse the insufficient knowledge of Russians about the securities market regulation, and solicit investments into activities such as Forex trading. Typically, the fraudsters create a facade that the deposit of investors are increasing thanks to gains and demand additional investments. Then, any attempt by the clients to withdraw their money, the balance suddenly becomes “zero” and the firm stops communicating with its clients.

According to the regulator, the companies that most often engage in such fraudulent activities with regard to the Russian market are: «Teletrade», «GRANDCAPITAL», «Delloy Trаde», «GLOBAL FX», «Kappabrokers», «GO CAPITALS FX», «KBCapitals»; «10 BROKERS»; «Swis Trade»; «BORN to TRADE», «Barclays Trade», «WerCrypto».

All of these companies are non-Russian entities and do not have the requisite licenses nor are they members of self-regulatory organizations.

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